Good to Great

by

Jim Collins

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Good to Great: Chapter 2  Summary & Analysis

Summary
Analysis
Collins opens with an anecdote about Darwin E. Smith, a former CEO of the paper company Kimberly-Clark. Despite being mild-mannered and lacking experience, Smith led the company through a marked transformation to greatness. Collins notes that although Smith was quiet and humble, he was also fiercely focused and ambitious. When he first became CEO, Smith decided to sell off the paper mills that had been Kimberly-Clark’s core business and focus instead on dominating the consumer paper products industry. Even though the business media mocked Smith, his bold move was successful.
With this example, Collins introduces the dual characteristics of Level 5 Leaders and underscores the importance of having the right person leading a company. Kimberly-Clark’s success going from an unremarkable company to a great one also highlights the idea that any organization can transform.
Themes
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The Importance of the Right People Theme Icon
Duality and Contradiction Theme Icon
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Collins characterizes Smith as an example of a Level 5 Leader. Level 5 Leaders “blend extreme personal humility with intense professional will,” and though they may be ambitious, their ambition is channeled toward their companies rather than their own egos. Collins notes that although he and his team were initially wary of ascribing importance to leaders, they eventually had to accept that every one of the eleven good-to-great companies was led by a Level 5 Leader at the time of their remarkable transitions.
The research team’s reluctance to place so much importance on leadership shows just how compelling and undeniable this finding ultimately is. Even though Collins didn’t want to perpetuate stereotypes about CEO-driven companies, the research clearly confirms this unique aspect of the book’s “right people” theme.
Themes
The Importance of the Right People Theme Icon
Duality and Contradiction Theme Icon
Collins notes that Level 5 Leaders are always characterized by not one, but two defining traits: modesty and fearlessness. He gives the example of Colman Mockler, the CEO of Gillette who led the company through several attempted takeovers and into a new era in which the company became a technological leader. In doing so, Mockler prioritized the company’s long-term success over his own short-term gains.
Level 5 Leadership is the book’s first clear example of the importance of duality. Level 5 Leaders are not just humble or just fearless; they must be both in order to be uniquely effective.
Themes
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Additionally, Level 5 Leaders are often devoted to ensuring that the company thrives after they are no longer its leader. For example, David Maxwell, the former CEO of Fannie Mae, requested that part of his retirement package be donated to a fund for low-income housing because he worried that public opinion of the large payments would damage the company’s reputation. Leaders of good-to-great companies usually set their successors up for success, while comparison companies usually did the opposite.
The note about Level 5 Leaders setting their successors up for success hints at the next chapter’s focus on having the right people at all levels of a company and at all times, not just during the tenures of certain remarkable CEOs.
Themes
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Collins notes that in interviews for the book’s study, Level 5 Leaders rarely talked about themselves, instead commending others for their companies’ success. Those who knew these leaders also describe them as modest and self-effacing. In contrast, the research team found that the leaders of the comparison companies were often egotistical and focused on advancing their own reputations over those of their companies.
Popular wisdom often holds that charismatic go-getters achieve the best results, but the study actually shows that having a strong sense of personal ego can be bad, as shown in the comparison company leaders. Through revealing this truth, Collins returns to the idea that anyone might be able to work toward a transition to greatness, even without exceptional personal attributes.
Themes
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In conclusion, Collins reiterates that Level 5 Leaders are not just humble. Rather, they balance their humility with a relentless drive to accomplish what needs to be done for their companies’ success. They pursue their goals with rigor and strive for excellence, but they do not look for personal glory. Additionally, they view their good fortune as luck while accepting responsibility for bad fortune; that is, they rarely view bad luck as the cause of failure. Collins notes that although it is not clear how one becomes a Level 5 Leader, he suspects that many seemingly ordinary people have the potential to grow into this role and recommends that readers follow the steps outlined in the rest of the book in order to see if they can become Level 5 Leaders.
Collins reiterates the inherent duality of Level 5 Leaders and, by de-emphasizing the role of luck in their success, again suggests that fortunate circumstances are not necessary for greatness; anyone can pursue greatness regardless of situation. Describing the relentless focus of these leaders, Collins also hints at the themes of focus and consistent effort that he develops further in the coming chapters.
Themes
The Possibility of Transformation Theme Icon
Focus and Consistency Theme Icon
Duality and Contradiction Theme Icon
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